Anita's New Mexico Mexican Food v. Anita's Mex Foods Corp

• Decision Date: 03 December 1997
• Docket Number: CA-97-510-A,No. 97-1942,97-1942
• Citation: 201 F.3d 314
• Parties: (4th Cir. 2000) ANITA'S NEW MEXICO STYLE MEXICAN FOOD, INCORPORATED, Plaintiff-Appellee, v. ANITA'S MEXICAN FOODS CORPORATION, Defendant-Appellant, and QUEEN INTERNATIONAL FOODS, INCORPORATED, Defendant. (). . Argued:
• Court: U.S. Court of Appeals — Fourth Circuit

Page 314

201 F.3d 314 (4th Cir. 2000)

ANITA'S NEW MEXICO STYLE MEXICAN FOOD, INCORPORATED, Plaintiff-Appellee, v. ANITA'S MEXICAN FOODS CORPORATION, Defendant-Appellant, and QUEEN INTERNATIONAL FOODS, INCORPORATED, Defendant.

No. 97-1942 (CA-97-510-A).

UNITED STATES COURT OF APPEALS, FOR THE FOURTH CIRCUIT.

Argued: December 3, 1997.

Decided: January 7, 2000.

Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria.

Claude M. Hilton, Chief District Judge.

COUNSEL ARGUED: Thomas Joseph Moore, BACON & THOMAS, Alexandria, Virginia, for Appellant. Mark Peyser Friedlander, Jr., FRIED-LANDER & FRIEDLANDER, P.C., Arlington, Virginia, for Appellee.

Before WIDENER, Circuit Judge, HAMILTON, Senior Circuit Judge, and James H. MICHAEL, Jr., Senior United States District Judge for the Western District of Virginia, sitting by designation.

Affirmed by published opinion. Judge Widener wrote the opinion, in which Senior Judge Hamilton and Senior Judge Michael concurred.

OPINION

WIDENER, Circuit Judge:

This case arises from an alleged breach of a stipulated judgment previously entered in a case of a trademark appeal between Anita's New Mexican Style Mexican Food, Inc. (Anita's Virginia) and Anita's Mexican Foods Corp. (Anita's California) in the United States District Court for the Central District of California. Anita's California contends that the United States District Court for the Eastern District of Virginia erred in denying its motion to dismiss by holding that the district court had jurisdiction over the case and that the complaint stated a claim upon which relief could be granted. In addition, it appeals the district court's entry of an injunction that is duplicative of the injunction entered by the United States District Court for the Central District of California. We affirm.

I.

When reviewing a district court's denial of a motion to dismiss, we consider that the facts alleged in the complaint are true, McNair v. Lend Lease Trucks, Inc., 95 F.3d 325, 327 (4th Cir. 1996), and we construe the allegations in the light most favorable to the pleader. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974).

In 1987, after an adversarial hearing, the United States Patent and Trademark Office decided that Anita's California had superior rights to the trademark ANITA's. Anita's Virginia appealed this decision in the United States District Court for the Central District of California pursuant to 15 U.S.C. § 1071(b). The parties settled that civil action by entering a detailed stipulated judgment which was entered as an

order by that district court on October 17, 1988. Relevant for our purposes, the stipulated judgment prohibited Anita's California from selling prepared Mexican food products under the trademark ANITA's outside of California. Furthermore, Anita's California agreed that it would ensure compliance of its licensee, Queen International Foods, Inc. (Queen International), and any other future licensee, with the terms of that judgment. Anita's California agreed in the stipulated judgment that it "controls the nature and quality of the goods and services sold in association with any trade name, trademark or service mark comprising ANITA'S, by Queen International Foods, Inc." In December 1996, Anita's Virginia discovered that prepared Mexican food products, under the trademark ANITA'S, labeled "Manufactured by Queen International Foods, Monterey Park, CA," were being sold in Virginia. On December 20, 1996, Anita's Virginia sent a letter to Anita's California requesting immediate compliance with the stipulated judgment. Anita's California subsequently terminated its license of the ANITA's trademark to Queen International in a February 11, 1997 letter. Anita's California then advised Anita's Virginia of this termination on February 12, 1997.

On April 9, 1997, Anita's Virginia filed a civil action against Anita's California and Queen International in the district court for the Eastern District of Virginia, alleging that both defendants were in breach of the order of the district court for the Central District of California and the Stipulated Judgment. Anita's Virginia, in that suit, requested a preliminary injunction, and Anita's California filed a motion to dismiss, on which the court held a hearing. The court heard the motion on May 23, 1997. Queen International defaulted, and the court continued the case against it pending a hearing on the issue of damages.^* In a June 10, 1997 order, the court denied the motion to dismiss and granted the preliminary injunction, from which order Anita's California appeals.

II.

Anita's California first challenges the district court's jurisdiction. Whether the district court had subject matter jurisdiction is a question of law that we review de novo. Jordahl v. Democratic Party of Virginia, 122 F.3d 192, 197 (4th Cir. 1997). We review the district court's finding of personal jurisdiction de novo , while reviewing the district court's findings of fact for clear error. Young v. F.D.I.C., 103 F.3d 1180, 1190 (4th Cir. 1997).

A.

Considering subject matter jurisdiction first, we observe that the parties do not dispute that they are completely diverse and that the amount in controversy is satisfied. Accordingly, this case is squarely within the language of 28 U.S.C. § 1332 (1997). Nevertheless, Anita's California contends that the district court lacks subject matter jurisdiction because the United States District Court for the Central District of California has exclusive jurisdiction to remedy any violation of the stipulated judgment. We disagree.

It is widely accepted that institution of a second action on a judgment is a valid method of enforcing that judgment. See In re Professional Air Traffic Controllers Org. (PATCO), 699 F.2d 539, 544 (D.C. Cir. 1983); Urban Indus., Inc. of Kentucky v. Thevis, 670 F.2d 981, 985 (11th Cir. 1982); Stiller v. Hardman , 324 F.2d 626, 628 (2d Cir. 1963); 18 Moore's Federal Practice 3d § 130.33 (1997). Moreover, the second action does not have to be filed in the same district court that rendered the judgment in the first action. Therefore, the district court that rendered the judgment in the first action does not have exclusive jurisdiction over the enforcement of that judgment. If the district court hearing the second action has subject matter and personal jurisdiction, the action is properly before the second court. The only instance in which a subject matter jurisdiction problem arises in the second action is where the first action was based on federal question jurisdiction. See Stiller, 324 F.2d at 628 (discussing problem of second action jurisdiction when first action based on federal question jurisdiction); 18 James Wm. Moore, et al., Moore's Federal Practice, § 130.33 (3d 1997) ("[I]f the judgment sought to be enforced was from an action in which federal question jurisdiction was the basis of federal court jurisdiction, an action solely to enforce the judgment would lack the federal question jurisdiction and therefore could not be maintained in federal court."). In the present case, the problem that arises when the first action is based on federal question jurisdiction is not present because in the case at hand there is diversity jurisdiction for the instant case filed in the Eastern District of Virginia. Therefore, the district court in the present case had subject matter diversity of citizenship jurisdiction.

B.

Turning to personal jurisdiction, a district court sitting in diversity utilizes a dual analysis when jurisdiction is sought through a long-arm statute. World-Wide Volkswagen v. Woodson, 444 U.S. 286, 290 (1980). First, the court must determine whether the defendant falls within the meaning of the statute involved. Peanut Corp. of Am. v. Hollywood Brands, Inc., 696 F.2d 311, 313 (4th Cir. 1982). If so, the district court must determine that its exercise of jurisdiction does not overstep the bounds of the Constitution. Peanut Corp., 696 F.2d at 313.

The Virginia long-arm statute provides jurisdiction over any person who acts directly or by agent as to a cause of action arising from business activity transacted in the State. Va. Code§ 8.01-328.1(A)(1) (Michie 1992). The Virginia Supreme Court has interpreted the statute to require only a single transaction in Virginia. Kolbe, Inc. v. Chromodern Chair Co., 180 S.E.2d 664, 667 (Va. 1971). In the present case, we conclude Queen International was an agent of Anita's California under the terms of the STIPULATED JUDGMENT. Consequently, the multiple transactions of selling Mexican food products in Virginia fulfills the requirements of Virginia's long-arm statute that the defendant be "transacting any business in this Commonwealth." Va. Code § 8.01-328.1(A)(1) (Michie 1992).

Under the law of agency in Virginia, the power of control is ordinarily a determinative factor in ascertaining the alleged agent's status. Texas Co. v. Zeigler, 14 S.E.2d 704, 706 (Va. 1941). The Supreme Court of Virginia, in a context similar to that present here, examined whether a principal-agent relationship existed under Va. Code § 8.01328.1 in Kolbe, Inc. v. Chromodern Chair Co., 180 S.E.2d 664, 667 (Va. 1971). In determining whether a company fell within the reach of the long-arm statute, the court held that an agency relationship exists when the agent acts "under the authority and direction of" the principal. Kolbe, 180 S.E.2d at 667. Thus, the court held that the manufacturer fell within the long-arm statute when a manufacturer's local representative, acting under the authority and direction of the company, secured the signature of a distributor in Virginia. Kolbe, 180 S.E.2d at 667. In denying Anita's California's motion to dismiss, the district court in the case before us implicitly found that Anita's California acted in Virginia. Queen International sold Mexican food products in Virginia under the authority and direction of Anita's California. Queen International was...